TaxTMI 
TaxTMI 
2026 (8) TMI 667
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....on was a tenancy agreement and not transfer of land/building. (b) Misapplication of Section 50C: The CIT(A) failed to appreciate that Sec. 50C applies only to transfer of capital asset being land or building or both. Tenancy rights, though capital assets, are distinct and outside the ambit of Sec. 50C. Reliance is placed on: a. Greenfield Hotels & Estates Pvt. Ltd. (Bombay HC), [2017] 77 taxmann.com 308 b. Atul G. Puranik (ITAT Mumbai), [2011] 11 taxmann.com 92 (Mumbai) c. Fleurette Marine Hatam (ITAT Mumbai), [2015] 61 taxmann.com 362 (Mumbai Tribunal) d. Kishori Sharad Gaitonde (ITAT Mumbai), IT Appeal No.1561 (Mum) of 2009 (c) Nature of Transaction Misinterpreted: The CIT(A) erred in holding that absence of duration clause in tenancy agreement implied perpetual transfer of ownership. The agreement clearly stipulates monthly rent, advance deposit, and landlord's continuing rights, which are inconsistent with ownership transfer. Ground No.2 The Learned CIT(A) erred in confirming the order of the Assessing Officer by not considering the facts of the case and not following the judgment of B....
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.... the tenancy of Room No. 16, 4th Floor, situated at 19/21, Lad Wadi, Hanuman Lane. Since the assessee did not furnish the registered tenancy deed or any supporting documentary evidence, the Assessing Officer relied upon the information available on record indicating that a document had been registered on 13.06.2017 for a value of Rs. 32,28,000/-. Consequently, the Assessing Officer issued a further notice requiring the assessee to explain the nature of the rights transferred under the said document and to clarify whether the provisions of section 50C of the Act were attracted. 2.2. In response, vide letter dated 15.03.2021, the assessee submitted that the document in question was merely a tenancy agreement dated 13.06.2017 under which the premises had been let out on a monthly rent of Rs. 375/-, with three months' rent received in advance. It was further explained that the value adopted for the purpose of levy of stamp duty was Rs. 34,38,000/-, being the value determined by the stamp valuation authority in accordance with the applicable stamp duty provisions governing tenancy/lease agreements, and that such valuation did not represent the consideration received by the assess....
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............ 269UA .................... (d) "immovable property" means- (i) any land or any building or part of a building, and includes, where any land or any building or part of a building is to be transferred together with any machinery, plant, furniture, fittings or other things, such machinery, plant, furniture, fittings or other things also. Explanation.-For the purposes of this sub-clause, "land, building, part of a building, machinery, plant, furniture, fittings and other things" include any rights therein ;................... 7. As discussed above, the immovable property having 242 sq ft area at Room No. 16, 4th Floor, 19/21, Ladwadi, Hanuman Lane, Mumbai-400 002 has been transferred by way of entering into an agreement of lease which does not put any restriction on the buyer for enjoyment of the said immovable property for indefinite time. Also, the agreement does not contain any remaining rights in the property for the assessee nor it creates any liabilities/restrictions what so ever in the case of buyer. Thus, in view of the provisions of section 2(47)(vi) r.w.s 269UA it is clearly a transfer of building and therefore the provisions of section 50C....
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....iya Ravi Mishra before AO in respect of a property ad measuring 242 square feet and the monthly rent as per the said agreement was Rs. 375/- and it was also stated that appellant was given Rs. 1,125/- (three months' rent) as advance. It was noticed by the AO that the duration of the agreement was not mentioned and under these conditions, it is considered as if the agreement for tenancy rights is entered into with the tenant for perpetuity. It was held that the rights of immovable property /capital asset had been transferred to the tenant i.e. Smt. Anusuiya Ravi Mishra. The property under reference was Room No-16, 4th Floor, 19/21, Ladwadi, Hanuman Lane, Kalbadevi, Mumbai-400002, which was an immovable property coming into appellant's possession by way of inheritance as a Karta of HUF of Purshottam Keshavji Dharamshi. In this regard a partition deed dated 10.03.1972 was furnished by appellant before AO. It was held that the appellant is a owner of the immovable property and not merely, a lease holder and in absence of any duration of the agreement, the agreement for tenancy rights can be held to be entered into with the tenant for perpetuity. In other words, the rights of immovable ....
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....ty in question fell to the share of Purushotam Dharamshi HUF. 4.1. The Ld.AR further submitted that the property continues to be owned by the members and coparceners of the said HUF, as is also evident from the property card. It was contended that the assessee appears before the Tribunal only in his capacity as the Karta of the HUF and not as the individual owner of the property. Therefore, any income arising from the property, including rental income or capital gains, if any, is assessable only in the hands of the HUF and not in the hands of the assessee in his individual capacity. It was, therefore, submitted that the addition made in the individual assessment of the assessee deserves to be deleted on this ground alone. 4.2. Without prejudice to the above, the Ld.AR submitted that the authorities below have erroneously invoked the provisions of section 50C of the Act in respect of a tenancy agreement. It was argued that the Assessing Officer has incorrectly treated the value adopted by the stamp valuation authority for the purpose of levy of stamp duty on the tenancy agreement as the full value of consideration received by the assessee for transfer of tenancy rights, despit....
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....e outset, we find that the Revenue has proceeded on the premise that the assessee had transferred an immovable property for a consideration equivalent to the value adopted by the stamp valuation authority. However, from the material placed on record, it emerges that the document registered on 13.06.2017 is a tenancy agreement under which the premises were let out on a monthly rent of Rs. 375/-. Except for the value adopted by the stamp valuation authority for the purpose of levy of stamp duty, there is no material brought on record by the Assessing Officer to demonstrate that the assessee had received any consideration of Rs. 32,28,000/- or Rs. 34,38,000/-, or any amount whatsoever, over and above the agreed rent. 5.2. Section 50C creates a legal fiction whereby the value adopted by the stamp valuation authority may be substituted as the full value of consideration only in respect of the transfer of a capital asset, being land or building or both, where the actual consideration declared is less than such value. The provision cannot be invoked in isolation merely because a document has been subjected to stamp duty valuation. Before invoking the deeming fiction, the Revenue must f....